"You've Caught the NET!"

The rules for home borrowers are tightening up here in Cook County IL (the county in which Chicago is located).  Specifically, certain first-time buyers, considering several "high risk" loan products, will now have to complete a counseling session before they close on their new home.

This "Cook County Predatory Database Lending Program" debuts July 1st.  It will cover, initially, only Illinois most populous county, and impact first-time buyers most directly.  But new county mortgage recording requirements will affect every single mortgage recorded, beginning next month here.

Only loans offered through Mortgage Brokers or Independent Loan Originators licensed in Illinois will have the counseling requirement for select borrowers.  Loans written directly through banks are not affected, since bank-employed loan officers are not required to be licensed in the same way independent loan originators are in IL.

In a nutshell, borrowers will have to be counseled about their loan if -

They are first-time homebuyers in one-to-four unit residential properties in which they will reside, and the loan itself meets one or more of these characteristics -

The loan permits interest-only payments, or

The loan could result in negative amortization, or

The total points or fees payable at closing by the borrower will exceed 5% of the loan amount, or

The loan features a pre-payment penalty, or

The loan is an Adjustable Rate Mortgage (ARM), where the first rate adjustment occurs within the first three years of the loan term.

Beginning July 1, 2008, every mortgage instrument recorded in Cook County IL will require either a Certificate of Compliance, for borrowers who completed required mortgage counseling, or a Certificate of Exemption, for borrowers not required to engage in counseling.  Certification Forms will be available from Closing Agents at Title Companies throughout IL. 

Virtually all property transfers across Illinois are completed and insured by a Title Company, and with an Agency Closing.

Training is required for all IL Independent Mortgage Brokers and Loan Originators in advance of the July 1st start date of the new program.  Explanatory info is being mailed to all IL Real Estate Practitioners as well.

See our post earlier today at BlogChicagoHomes.com for more information, as well as a link to a Fact Sheet published by the Illinois Department of Financial & Professional Regulation explaining the program.

DEAN & DEAN'S TEAM CHICAGO

Happy Friday Afternoon, Folks!

Guess who came in to one of my listings yesterday?  Wearing an old shirt, carrying a yellow legal pad, and fingering his calulator!

You might know the guy - his name: LOWBALL LOUIE!  I hear he gets around, all over the country, and all around the world, for that matter.

He is often accompanied by his Buyer's Agent - I Hafta Do What Ever He Says IDA!  A real accomodating sort!  She always has load of clients she is carting around in that gas-unfriendly SUV she drives, but never makes any money to buy gas!

LOWBALL LOUIE went to school you know!  Graduate School!  Post-Grad!  His Degree - Doctor of Wasting Time, with a Specialty in Don't Listen to Anybody's Advice Who Should Know Better Than You.

My listing is priced low.  Painfully low.  Even for today's market.  And, my seller clients - they're nice, but stressed, and getting tighter and tighter on their money, now that they've moved on to their new condo.

Guess what Louie and Ida do?  You'll NEVER guess!

They put together a ridiculous, 20%-below-list-price, unthought-out offer (did you guess right?)  They fax it to me, and then have the gall to request an in-person presentation!  (Luckily, client requested, in writing, at start of listing, that all offers be presented by our Team, as their fiduciary, ONLY!  Thank heaven for little miracles!)

Today, in The Chicago Tribune, our Director of Buyers Agency Services, Kathleen Weaver-Zech, was quoted as saying that, for many, the BARGAINING is the key to their offer.  "They would rather steal a place - any place - than get the house they want at a reasonable price," she intoned.

I could see LOWBALL LOUIE'S point if the house were grossly overpriced, or in poor condition, or in a challenged location.  But none of these applied here!

There was apparently no analysis of the comps.  No considering my seller's mortgage position.  No considering any other factors at all, apparently, except, "Let's Give It a Try, Ida!" 

Ida, fearing one less person to cart around in her big SUV, immediately agreed.

Two questions here are relevant -

First, has LOWBALL LOUIE paid you a visit recently, especially in today's real estate market?  How did you respond?

Second, your thoughts on I Hafta Do What Ever He Says IDA?  She is eager to please, you know.  Would you want her to do an in-person presentation to one of YOUR Listings Clients?

We'd love to know what YOU think!

See our post today @ BlogChicagoHomes.com for our thoughts, and read Chicago Tribune Reporter Mary Ellen Podmilik's take, on buyer's offering low in today's market.

DEAN & DEAN'S TEAM CHICAGO

THE CHICAGO IL REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!

Yesterday was "Throwback Day" at Wrigley Field!  Both the Chicago Cubs and the Atlanta ("Boston") Braves wore 1948 style uniforms.  The outcome was a lot different (as were the PRICES) - 60 years ago the Cubs were Butt Ugly.  Today, they KICK BUTT!  GO CUBS GO!

Feeling stressed?  Stressed financially, I mean.  If you are - and many, human and dog alike, are - you're definitely not alone.  And if you're not careful, stress can really hurt you!

When stressed, the body releases adrenaline and cortisol, the hormone scientists have proven is tied to stress.  These chemicals can be a good thing when they provide the ability to react quickly in an emergency situation.  But if you're under stress two long, actual physiological problems could follow.

Edward Driscoll is a 38-year-old executive from the Boston Suburb of Braintree MA.  He has accumulated over $10,000 in revolving debt.  Every month, at bill paying time, he often worries about where the money to pay the bills will come from.  He has developed stomach ulcers - his wife, Kimberly, often experiences panic attacks.

Other stress-related health issues can include lost sleep, muscle and back aches, and sudden migrane headaches.

Most humans, and virtually all Little Dogs, handle their debt OK, according to a recent survey by the Associated Press, in conjunction with AOL.  But others are "suffering terribly due to their high debts, and their health is likely to be negatively impacted by them," per Research Psychologist Paul J. Lararakas.

Lararakas's findings are supported by medical research, who link higher levels of certain illnesses to today's stressful economic times, and higher costs of paying daily living expenses.  The AP/AOL Poll indicates stress over debt is 14% higher among those surveyed than it was four years ago, in 2004.

The Poll indicates 27% of those indicating financial stress had ulcers or other digestive disorders, compared with 8% of survey respondents reporting lower stress over their outstanding debts.  Migraines or other headaches were suffered by 44% of the high-debt-stress group,

Roughly 29% suffered severe anxiety or panic attacks, and 23% experienced moderate to severe depression, compared to only 4% of those with less debt stress.  Six percent reported having heart attacks, chest pains, or other cardiac disorders.

And greater than half of those most stressed about their debt experienced muscle tension, or chronic back pain.  Less than one-third of the group reporting low stress over debt experienced the same medical issues.

Today, most in the U.S. are taking on increased levels of debt. A tougher economic climate, fueled by the slowing economy, thousands of lost jobs, skyrocketing prices for gasoline and food, and the national dip in home market values, create considerable financial strain.

Debt on Revolving Credit Cards is up nearly 20% since 2004.  The average auto loan - $27,397 today, versus $24,888 four years ago.  Home mortgages, in aggregate - up nearly 35% during the same time period - to $10.5 Trillion!

In total, the share of take-home pay that goes to serving financial obligations was 20% of the average American human's paycheck in 2007, versus 18.5% three years earlier - an increase of eight percent!

Which demographic groups experience the highest level of debt-related stress?  The survey found that upwardly-mobile,"striving," middle-class families had the greatest levels of stress over their debts.  Other high-stress demographics:  women, couples with young children, working families with low household incomes, those who graduated high school but did not attend college, and Democrats. 

Those less likely to be impacted by debt stress - Republicans, retirees, men, empty nester families, and those with a college degree.

Thankfully, we Little White Dogs are not included in the high-stress group! 

But, sometimes, the human members of Dean's Team Chicago are feeling the pinch a bit.

What about you?  Please share!

See our post today @ BlogChicagoHomes.com, along with a link to a story in Wednesday's Chicago Tribune by Jeannine Aversa.

YOUR ACE REPORTER ON FOUR PAWS,

BUDDY HOLLY MOSS & DEAN'S TEAM CHICAGO

Good Evening, Folks! 

Hope you're having a pleasant night, out in Real Estate Land!  (When I'm done posting this, I'm going to catch up on an old "Honeymooners" episode on the Classic TV Station here in Chicago - Channel 23 on cable)!

There has been considerable press, both nationally and here in Chicago, that the price drops we have endured in the recent real estate crumble may be coming to an end - prices may be bottoming out, and at demand will soon pick up once again.

This one practitioner's impresssion suggests NOT QUITE YET!    I've looked at numeric statistics and plain old buyer and seller behavior here, just to provide a quick read. 

First, a bit of the psychological -

1.  Buyers are still waiting on the sidelines for prices to dip further - three of our current buyer clients seem to be stalling at the present time.  Some clients fear they won't qualify for a loan, and are waiting to save more money and/or pay down more debt before they chance pre-approval.

2.  Buyers who do offer often submit a lowball.  Then, during the inspection, they often make ridiculous demands - asking $10,000 for a new roof, when the inspection report indicates it has several years of life left in it, or asking for unwarranted cosmetic repair, upgrade or improvement.  The most brazen simply ask for a large wad of money at closing.

3.  Sellers often hold back putting their house on the market, if they can afford to do so.  They've heard all of the horror stories from others, and have seen the often year-old signs in front of the homes of their neighbors.

4.  Fewer sellers are buying a new home without getting a solid contract on their current home.  Many don't want to bear the probable financial risk of owning two homes.  Others feel they can't qualify, even if they wanted to buy contingent on sale.

5.  There is less negative reaction to a market-based Broker's Fee (never say "commission!"), especially if they previously tried to sell with a less-than-full- service, or discounted-fee broker, without success.  (That being said, however, there are still many RE agents willing to "Buy the Listing," for low compensation, and at a too-high price - because they are desperate for business).

6.  Hey, have you seen the price of gasoline lately?  Milk?  Bread?  Even beer and pizza?  Sky high!  Many folks attitude - "How can I even CONSIDER a new home - I can't even afford to fill up my car, or feed my family!"  Hard to prove any direct relationship - but the mood and attitude is clear - "We have to wait!" (Hey, what do you suppose a precipitous drop in gas prices would do to housing demand - sounds unlikely, but even a modest drop could brighten sour, frustrated, and scared-stiff attitudes about upgrading your home, or buying real estate for investment).

Now, some numbers, from the North and Northwest Sides of Chicago, and select Chicago Neighborhoods in which we do the bulk of our business.  The following numbers are based on single family, condominium, and small multi-unit sales (2-4 units), comparing two dates in 2008 - the week ending last Sunday, June 8th, and roughly three months earlier - the week ending March 9th.

	w/e 03/09/08	% OF ACTV	w/e 06/09/08	% of ACTV	% CHANGE
ACTIVE LISTINGS	4,480		5,201		116.09%
NEW PEND SALE	72	1.61%	72	1.38%	86.14%
CLOSED	64	1.43%	105	2.02%	141.32%
AVG SALE PRICE	$340,268		$372,456		109.46%
AVG MKT TIME	178		131		73.60%
TOTAL VOLUME	$21,777,205		$39,107,880		179.58%
ABS RATE (3 MOS)	43.72		27.26		62.35%
% SOLD 180 DAYS	21.65%		22.57%		104.25%

This data, from MRED LLC (formerly the Multiple Listing Service of Northern IL), is mainly observational - it is not a full-blown scientific study of all the market trend numbers here in Chicago.  But it does suggest the following -

1.  Active inventory for sale is up a modest 16% in the last three months, but the Percentage of Properties going "Sale Pending" is actually DOWN nearly 14%!

2.  Sales volume is strong - 79% up in the past three months, but average sales price is up only about 9.5%.  It would appear that the gain in volume is primarily coming from lower-priced properties that sell.

3.  Days on market here on the North and Northwest Sides of Chicago has decreased over 26%, but is still very high - over 4 months, on average.

4.  The Absorption Rate here - or the theoretical inventory level of properties for sale - has dropped 38% in the past three months, but is still unacceptably high.  The percentage of homes selling within a normal six-month marketing time frame - up only a wee bit, still very low - at just under 23%.

It is late Spring/early Summer here, and the weather is warm in Chicago. If this were a "typical" Chicago home selling season, it would be Prime Time.

But the lackluster stats, and the continued standoffish buyer and seller behavior, indicates there is likely a way to go before we take this sluggish train out of the tunnel!

Your impressions on your own Real Estate Market?  Please, share with us!

We just posted these obervations today, June 15, at our Blog Center - BlogChicagoHomes.com.  Please visit here for more info and trends on the Chicago Real Estate Market.

DEAN & DEAN'S TEAM CHICAGO 

The news headlines are full of stories about single-family homeowners losing their homes to foreclosure.  Few stories, however, deal with the fate of renters in apartment buildings, or other rental properties, when their landlords can't pay the mortgage on the property.

Here in Chicago, according to the Harvard Joint Center for Housing Studies, an estimated 14,000 property owners lost their properties to foreclosure last year.  An estimated 20% of these foreclosures involved multi-family rental properties, large and small.

What happens to the timely-paying tenants once the bank takes over the building?  They often get the heave-ho, and are forced to leave.

Illinois law does not require landlords or their lenders to notify their tenants of their possible mortgage default.  When a property is foreclosed upon and reverts to the bank, most lenders do not wish to become landlords themselves, nor take responsibility for maintenance and repairs on apartment buildings they now hold.  They prefer to secure the building, rather than take on building management responsibilities.

Since January of this year, the State of Illinois enacted a minimum 120 days notice before a tenant who is paying his rent on time would have to vacate his apartment.  Before this new law, tenants were often given far less notice to leave.

Displaced tenants also face another financial headache when the bank takes over - the return of their Security Deposits. 

Many cities and towns, including the City of Chicago, require timely repayment of tenants' security deposits - sometimes, with accrued interest.   In a foreclosure situation, however, the landlord is difficult to locate or sue, and may have no remaining assets if a tenant does litigate.  The security deposit is often not returned.

See our post today at BlogChicagoHomes.com for more details, as well as links to Anne Brennan's story in last Sunday's Chicago Tribune Real Estate Section.

DEAN & DEAN'S TEAM CHICAGO

One "side benefit" of the free-and-easy mortgage money of just a couple of years ago - virtually every homeowner could use their home as a piggy bank - tapping its seemingly-limitless equity for virtually any expense - necessary or fun money.  Rates were at prime or slightly higher, and banks begged you to establish your line.

Equity appreciation, they felt, were an automatic to rise forever.  Risks to the lender?  Naah!  Even if the lines went unpaid, the property against which they were collateralized were a sure bet to increase in value.

Not so anymore!

During those salad days of 2004 to 2006, here in Chicago and elsewhere, otherwise-responsible homeowners would tap up to 100% of their home's appraised value.  They would pay off high-interest credit card debts, private school tuition for their children, start a business, or finance a boat or luxury car.

Now, many of those same homeowners have first mortgages at or exceeding the present market value of their homes.  Their drawn equity lines put them over the top - sometimes, far over the top.  To avoid further loan losses, many lenders are freezing Home Equity Lines of Credit, or reducing the amount of the lines.  This is being done in addition to far-tighter guidelines and percentage of equity the lines can be established for in the first place.

One New York homeowner had his equity line, drawn to renovate his master bathroom, frozen before he could draw a penny of equity money.  Another had her available credit line cut in half after she completed a kitchen remodelling project.

A third homeowner, in California, was advised by his own Mortgage Broker to draw the balance of his $750,000 line in cash, and deposit it in his bank account.  He paid 6.9% interest on the drawn equity funds, but eliminated the possibility of the issuing bank freezing his loan.

Since 2004, delinquencies on HELOC's have increased over 500% - 1.74% of all Home Equity Line of Credit Borrowers are at least one month in arrears in their payments, according to First American CoreLogic, a lending research company out of San Francisco CA.  As the credit and real estate crisis continues in many areas of the U.S., experts expect this percentage to increase, perhaps considerably.

Traditional mortgage money has already been released into the hands of homeowners.  It cannot be "called back."  However, Home Equity Lnes of Credit can be easily frozen or reduced. 

As Don Romano, President of Shelter Rock Mortgage in Long Island NY, explains: Lenders "got into a risk position by being too generous with the credit lines, and credit lines are the only form of mortgage they have the ability to minimize."

Read our post today @ BlogChicagoHomes.com for more info, as well as a link to Ellen Yan's article in last Sunday's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO

Good Morning, AR! 

Here's the latest Stat Summary on the Chicago Real Estate Market, based on data pulled yesterday evening, June 8, 2008 -

Strong rebounds across the board this week - and that is encouraging!

Listing Inventory was stable over the past week, while Properties Pending Sale jumped sharply - over 26%!.  The Average Sales Price for Single Family, Condos, and Small Investment Apartment Buildings - two-four units - rebounded as well, although the average was down considerably last week. Average Market Time continues high.

The number of Sold Properties and Expired Property Listings increased for the second week, even though it is mid-month.    

Due to the increase in Average Sales Price, Sales Volume increased nearly 40% last week.   Let's see if the trend continues next week.

Absorption Rate, or average inventory turnover, was pretty much stable this past week - but is still high in parts of the City of Chicago.  The rate currently stands just over 27.2 months, down just 1% since last Sunday.

Percentage of Sale Within Six Month (180 Days) improved nearly 3/4 percent this past week, to 22.57%.  It is still very low, however - reflecting continued high average market times.

Communities and clients we serve reside, or plan to reside, in the Chicago Neighborhoods of The Chicago Loop, The Gold Coast, River North, Lincoln Park, Lakeview, Uptown, Edgewater, North Center, Lincoln Square, Albany Park, Ravenswood, Wicker Park, and Bucktown. 

Also, these Great Chicago Neighborhoods: Logan Square, Rogers Park , West Ridge, Portage Park, Jefferson Park, Norwood Park, Sauganash, Edgebrook, and Edison Park.   Plus All Chicago Suburbs. 

SINGLE FAMILY, CONDOS, AND SMALL MULTI-UNIT PROPERTIES - NORTH SIDE OF CHICAGO, NORTH OF ADDISON STREET, WEST OF ASHLAND AVENUE

                             ACTV LISTINGS        JUST SOLD         CLOSED        EXPIRED  

w/e June 9th               5,201                  72                      105                   101

w/e June 2nd              5,186                  57                       93                     88

% CHANGE                  +0.3%               +26.3%                +12.9%            +14.8%

CLOSED PROPERTIES DATA

                              AVG SALE PRICE     AVG DAYS ON MKT     TOTAL VOLUME   

w/e June 9th             $372,456              131 DAYS                      $39,107,880

w/e June 2nd            $300,977              128 DAYS                      $27,990.919

% CHANGE                 +23.7%                     +3.1%                         +39.7%

THEORETICAL TIME TO CLEAR EXISTING INVENTORY (ABSORPTION RATE) -

w/e June 9th - LAST 12 MOS - 18.29   LAST 6 MOS - 23.30     LAST 3 MOS -  27.26

w/e June 2nd- LAST 12 MOS - 18.09     LAST 6 MOS - 24.17     LAST 3 MOS - 27.52

PERCENT OF HOMES SELLING IN 180 DAYS - 

w/e June 9th - 22.57% (UNSOLD - 77.43%) 

w/e June 2nd- 21.93% (UNSOLD - 78.07%)

SOURCE: MIDWEST REAL ESTATE DATA LLC, AREA MARKET SURVEY DATA

Please visit and review our Chicago IL Real Estate Stats Pack Archive via our Team Blog Center - BlogChicagoHomes.com. 

Call us anytime for current trends in any Chicago Neighborhood or Chicago Suburb! 

DEAN & DEAN'S TEAM CHICAGO

Technology, Technology!  It's daily, sometimes minute-to-minute, advances never fail to amaze this Boomer!

Presently, Google Maps Software, available for most Internet-Enabled Mobile Phones, provides maps and driving directions between two points, anywhere in the U.S.

Soon, in Chicago and in many other cities, it will also offer routing via public transit!

For example, let's say you're at Wrigley Field, enjoying a Chicago Cubs game (assuming they're winning).  You want to go to dinner in the Lincoln Square Neighborhood of Chicago.  Which buses to take?

Google Maps will soon offer a transit routing option, in addition to the driving option, to get you there.

Currently, it's only available on a few cell phones (it's not yet working on my own Treo 755P - just tried it a few minutes ago), but it is expected to be widely available, and widely used, by the end of the year.

And, it's FREE!

Other major cities in which the new technology will be available include San Francisco, Seattle, and nearly 40 other nationwide.

See our post today via BlogChicagoHomes.com for more information, and a link to Eric Benderoff's "Eric 2.0" Blog from last Friday's Chicago Tribune for more information, and video.

DEAN & DEAN'S TEAM CHICAGO

Just when you were hoping for some good news in the real estate market, you hit the web, and find more distressing news.

Across the U.S. nearly 10% of homeowners fell behind on their mortgage payments during the First Quarter of this year!  This comes from statistics compiled by the Mortgage Bankers Association, and released last Thursday.

Recent drops in home value, here in Chicago and elsewhere, have left many homeowners owing more on their mortgages than their house is worth.  This is especially true for those who borrowed with high leverage within the past few years.

Here are some of the troubling statistics -

6.35% of the 45 million homeowners surveyed by the Mortgage Bankers Association were at least one house payment past due, compared to 5.82% in the Fourth Quarter, 2007 - a jump of 9%.

During the First Quarter, 2008, 0.99% of homeowners were notified that foreclosure procedures had started against their homes.  This compares to 0.83% during the final quarter of 2007 - an increase of 19%.

In all, 2.47% of all home loans were in foreclosure during the first quarter of this year, compared to 2.04% of homes at the end of December, 2007 - a more than 21% increase!

The type of loan (prime or sub-prime) has considerable bearing on the likelihood of the homeowner facing delinquency or foreclosure. 

MBA's statistics indicate sub-prime loans comprise about 6% of outstanding home loans today - and represent about 39% of total foreclosures.   Conventional loans comprise only 23% of those homes in the midst of foreclosure.

Late payments as a percentage of those with sub-prime loans is 22.07% of the total, up from 20.02% at the end of last year.

"The No. 1 problem is the drop in home prices," says Jay Brinkmann, Vice President for Research and Economics for the Mortgage Bankers Association.   Declining prices, especially in newer-built areas, "are hurting people's ability to recover when they run into trouble."

See our post today at BlogChicagoHomes.com for more info, and a link to last Friday's article in The Chicago Tribune from Chicago Tribune News Services.

DEAN & DEAN'S TEAM CHICAGO 

Add this to the growing list of prices going up in Chicago - fees for using a Bank of America ATM, if you don't happen to have a linked checking or savings account in the B of A!

What?  You're not shocked?  Perhaps you're just NUMB!

Effective Monday, June 23rd, the fee charged by banking kingpin Bank of America, for non-customers usting their ATM machines, will increase a hefty 50% - from the current $2/transaction, to $3!  Bank of America has over 18,000 ATM machines across the country.  They are now the second-largest bank network in the Chicago area, since they re-branded hundreds of area LaSalle Bank branches and ATM machines on May 5th.

Chicago's largest banking network - Chase - had the highest ATM fees for non-customers in the area when it raised its fee to $3 earlier this year.  Now, B of A has joined the party! (Bank of America delayed their ATM fee increase here, although it was instituted in every other B of A market nationally, until the re-branding of the old LaSalle branches last month.)

Although Bank of America spokesman Robert Darmanin stated that non-customer transactions at the typical ATM account for only 10% of the total, there are times when using a "foreign ATM" is unavoidable.  The other day, while at a Chicago Cubs game, I used a B of A machine for some quick cash; B of A ATM machines are the only ones installed at Wrigley Field!

Want another kick in the shin?

The local ATM fees are IN ADDITION TO the fees YOUR OWN BANK may charge for you using someone else's ATM. 

If you happen to be a Citibank customer, for example, and you take $50 from a Bank of America ATM, you might be charged $3 by Bank of America, PLUS an additional $2 by Citibank for not using one of their own ATM machines.  That amounts to a hefty 10% premium, for a modest withdrawl!

Speak up and complain, folks - but you might lose your voice trying!

See our post today at BlogChicagoHomes.com for more information, and a link to Becky Yerak's story in today's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO